A paper-based accounts payable workflow typically deters efficiency. Traditionally, employees are required to manually enter the data and track documents at every step of the AP process. The manual data entry process is time-consuming and may lead to various types of discrepancies, such as inaccurate data. However, there is a better way to handle the accounts payable process. Nowadays, most companies rely on automated accounts payable solutions to eliminate manual data entry processes while ensuring consistency in workflows and invoice processing.
Whether you are in the services domain or the manufacturing industry, accounts payable is an integral part of every company. An automated and digitized accounts payable solution can assist your company in achieving transparency and maintaining timely payment cycles. Here are some essential things to know about invoice processing and approval workflows.
Invoice Approval Process
Every business manages its invoices differently; therefore, the invoice approval process varies from company to company. Usually, the invoice approval process comprises a set of steps that a company follows while approving invoices. In simple words, it is a system with certain internal controls to prevent payments to unauthorized invoices.
The system of internal controls starts when an invoice is received and assessed for accuracy. Most companies implement a two-way and three-way matching process to verify invoices against POs and accordingly make the invoice payments. For instance, the details on the invoice, such as quantity, price, date, and other details, should match the information on the purchase order.
As you can see, manually supervising all these processes take time. However, with an automated accounts payable solution, you can free up your employees from tedious tasks and allow them to focus on productive tasks that add value to the organization.
Automated Invoice Approval Process
Approving invoices through an automated invoice approval workflow is something that will benefit your organization in the long run. Manual invoice processing methods are slow and can affect the efficiency of your accounts payable team.
You can make the whole process transparent By streamlining invoice approval with automated workflows. You will have complete visibility into the data when the vendor processes your invoice and match the exact details from a centralized system. Here are some of the core components of automated invoice approval workflow you should know.
- Invoices are received electronically, with data parsed in an automated environment by the AP software.
- Most AP software platforms come with a two-way and three-way matching mechanism. This mechanism enhances the speed of invoice processing.
- Efficient workflows imply you can send the invoices to the right person.
- As everything is automated, you will get enhanced data visibility and consistency. You will also get detailed insights into the AP processes.
- By implementing an AP software solution, there is no need to worry about fraud.
- You can cut down on processing costs and time.
- Overall efficiency of your AP team increases.
Automation is the Key to Success
Manual invoicing can create inefficiency that severely affects your company’s bottom line. When invoices are paper-based, they need to be routed from the receiver to the proper department. This single process can take days. In the presence of manual AP processes, invoice approval may take weeks or even months.
Lack of control
Another area where AP software wins is its ability to offer you great control. No one will have any information when you have paper-based accounts payable processes. It is usually tough to know its status.
In other words, in paper-based AP processes, there is always uncertainty. Modern-day organizations have to be competitive in all departments. You cannot be uncertain while managing the accounts payable of your company. With invoice approval workflows in AP software, it is easier to track them. Moreover, the processing time is short. Invest in AP software to minimize approval delays and discrepancies in the invoice processing procedure.